Seanad debates

Tuesday, 27 January 2009

Economic Situation: Statements

 

7:00 pm

Photo of Maurice CumminsMaurice Cummins (Fine Gael)

I listened to the Taoiseach speaking on the Order of Business in the Dáil today. I could not believe the arrogance he displayed at a time when he is asking for the co-operation of the Opposition and all sides on the economy. The best he could come up was to ask the Opposition to state their ideas. We have been giving him our ideas for the past six or seven years and more and not one of them has been listened to. The positive ideas given over the past six or seven years by our leader and our spokesperson on finance have been ridiculed. When we warned of a property bust after the boom, we were laughed at and told we were being negative instead of being positive. It is all very well to be positive when one has a reason to be with an economy built on solid foundations. When it was built on the foundations such as those in Ireland over the past several years, however, there was no reason to be positive. The chickens now have come home to roost.

Senator Callely spoke of a global storm. Continuing with the nautical theme, Ireland has no captain, first mate or leadership. It is a rudderless ship of state. Senator Callely told us not to talk about our difficulties but to be positive. This denial, as shown by the Minister for Finance on BBC's "Newsnight" recently, is what got us into the current problem in the first place. The Government is only waking up now after every economist has told it for the past six months, some even years ago, of the problems in the economy.

This Fianna Fáil, Green Party and other mixum gatherum Government's legacy is that in just 18 months it has managed to double the unemployment level and the national debt. This has never happened before in the State's history. May we get rid of this Government as soon as possible to ensure it will never happen again. The electorate is looking for leadership and policies which the Fine Gael Party has advocated for the past several years. An early general election is needed.

In its latest quarterly bulletin, the ESRI has forecasted the economy will contract by 5% in 2009 after an estimated contraction of 2.2% in 2008. This is unprecedented. It has been the greatest reversal in economic growth, both historically and by current domestic and international standards. In the depth of the last recession in the 1980s, the economy declined by 1.3% and 1.9% in 1982 and 1983, respectively. That is less than half the current rate of the current decline which shows how bad the Government has run down the economy.

While all countries face economic difficulties, not many of them face a crisis similar to Ireland's. According to OECD forecasts, developed economies as a whole are expected to grow marginally in 2009 while the next worst performing EU member state to Ireland will be Hungary, whose economy has contracted by 1.5%. Ireland has the worst deficit in public finances of any EU member state with borrowing likely to exceed €18 billion, 10% of gross domestic product, next year. The national debt will be doubled by 2010. Ireland will suffer the largest increase in unemployment of any EU member state.

Fianna Fáil wasted the boom and destroyed the fundamentals of the economy. The economy was left uniquely exposed to the global economic crisis. Of all the EU member states, Ireland had the largest property boom, the greatest dependence on the construction sector for jobs, the highest levels of personal indebtedness, the largest increases in costs and the greatest loss of export market share.

The economic principles that delivered the prosperity of the Celtic tiger in the 1990s were keeping costs down, ensuring high levels of productivity, export-led growth, tight budgeting and prudent regulation of the financial sector and the housing market. All these principles were abandoned by the Government. The impact the collapsing economy will have on families and communities will be devastating. Private sector wages will fall for the first time in the State's history, even as Ireland will remain the most expensive EU member state for food and household goods. Employment is expected to fall by 116,000, 2,000 jobs a week, pushing up the live register to 375,000 by the end of 2009.

The Government's policies are putting people into unemployment. Competitiveness has been affected. The ESB's electricity prices, for example, will not come down because of regulation even though oil prices have dropped significantly. Domestic and industrial electricity prices should be coming down so we can position ourselves properly to come out of this recession.

Only in recent months has the Government used the term "recession". It was afraid to mention it before then when everyone else could see the economy tumbling. The people will have to make sacrifices because of this Government's failure and that of the Government in which the Taoiseach was Minister for Finance. The best the Government can do now is ask us for our ideas. It would not listen to us for the past seven years. Now it wants to hear these ideas and claim it is implementing Fine Gael's cuts. It will not work and the public will not buy it any more.

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